Japan Industry

Japan: Industrial production shows resilience in October

November 28, 2014

In October, industrial production expanded 0.2% over the previous month in seasonally-adjusted terms, which followed the revised 2.9% increase recorded in September (previously reported: +1.9% month-on-month). The print contrasted the 0.6% drop that market analysts had expected and represented the second consecutive expansion in output.

According to the Ministry of Economy, Trade and Industry, the categories that made the greatest contributions to the monthly rise were general-purpose, production and business oriented machinery, electrical machinery and electronic parts and devices. As a result of October’s unexpected increase, the government maintained its general assessment of industrial production, stating that, “industrial production fluctuates indecisively.”

On an annual basis, industrial output fell 1.0% in October, which contrasted the 0.8% increase tallied in the previous month. As a result, annual average growth in industrial production ticked down from 3.9% in September to 3.3% in October.

Meanwhile, the Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 2.3% expansion in November, which was above the 1.0% increase that was forecast in the previous month’s survey. In addition, manufacturers expect a 0.4% expansion in December.

FocusEconomics Consensus Forecast panelists see industrial production expanding 2.5% in 2014, which is down 0.4 percentage points over the previous month’s projection. In 2015, the panel expects industrial production to rise 1.6%, which is down 0.2 percentage points from last month’s estimate.

In December, the core consumer price index stayed flat compared to the previous month in seasonally-adjusted terms, contrasting a 0.1% rise in November.
Core inflation remained steady at November’s 0.9% in December, which represented the joint-highest reading since March 2015.